In his speech Tuesday night (at 0:51 in this video), libertarian Republican presidential candidate Ron Paul said, “Back in the old days in the early 70s, Nixon said we’re all Keynesians now, which meant that even the Republicans accepted liberal economics. . . . I’m waiting for the day when we can say we’re all Austrians now.” He was referring to the Austrian School of Economics which teaches, among other things, the benefits of free markets.

I too am waiting for that day.  Paul’s hopes (and mine) notwithstanding, it seems that day is far off.  While Republicans no longer accept Keynesian economics, many have resigned themselves to a somewhat intrusive federal government.  House Budget Committee Chairman Paul Ryan, for example, a folk hero to many conservatives (including yours truly) has proposed reforming Medicare rather than privatizing this federal (i.e., government) program which provides health insurance coverage for the elderly.

When we talk about scaling back the size of the federal government, we may long for a federal government the size it was when John F. Kennedy took office — or when Calvin Coolidge returned to Massachusetts, but we would settle for using the FY 2007 baseline to set current spending.  The more optimistic among us strive to return to the FY 2001 baseline.e.  That is, even some of the most conservative among us would be content with the spending levels set by the Clinton administration (in cooperation with Republican Congresses).

Bill Clinton, in seeking to “reinvent government,” sought to reform existing federal programs and make them more efficient, a notion not unlike the entitlement reforms proposed by Ryan and some of the Republican presidential candidates.  One such candidate, former Utah governor Jon Huntsman may have put forward a bold economic plan, advocating repeal of intrusive legislation passed in the Obama and Bush administrations, but the only other federal institutions he proposes abolishing are the GSEs (government-sponsored enterprises), Fannie Mae and Freddie Mac, which sparked “the Panic of 2008″.

In short, like Bill Clinton, we conservatives have, by and large, resigned ourselves to reinventing government (though, to be sure, we come at this resignation from the right, he from the left**).  We recognize that the American people expect the state to have a considerable role in our lives, “considerable” here meaning programs created by the “progressive” reforms of the Roosevelts as well as those of the Great Society and Nixon eras, but have become increasingly wary of the more burdensome regulations of the George W. Bush and Barack Obama administrations. (more…)